Hanoi
Vietnam’s capital city Hanoi has a rapidly-growing population that is currently approaching 3.5 million and things are getting a little cramped. As a result of the white-hot economy and property supply consistently falling short of demand, competition for residential and office space is fierce, and both rental rates and unit purchase prices are sky-rocketing.
Supply is so short that experts have suggested that at present, someone looking to rent new grade A office space in a central location would face a one to two year wait.
The serviced apartment market in the city is experiencing similarly limited supply and high rents (about US$19 to US$50 per square metres a month). Experts say however, that the bubble will last until the end of 2009 when supply and demand will reach a relative equilibrium.
Buying Property in Hanoi
In 2007 the estimated capital injection into the Vietnamese property market reached US$5bn, mainly foreign direct investment (FDI). The British Virgin Islands for example invested almost $2.7 billion in Vietnam, while Singapore pledged $2.2 billion. The increasing interest in the city meant property prices in Hanoi tripled from 2006-07. In 2006 new apartments in Hanoi were being snapped up for $80,000 but by the summer of 2007 this rocketed to $240,000.
More on buying property in Hanoi.
Condos in Hanoi
At present foreigners are not permitted to own condominiums in Vietnam, but from 1 January 2009 this restriction will be halted and both overseas Vietnamese and foreigners will be allowed to buy into condominium developments once they meet certain conditions. The law states that foreign organisations and individuals are allowed to buy and own an apartment in a commercial housing development project and that foreign individuals can own an apartment for 50 years and extend ownership once for another 70 years. More on buying condos in Hanoi.
Houses and land in Hanoi
Vietnamese laws now do not permit foreign individuals and organisations to buy houses in Vietnam. Under the Vietnamese Business Law and Housing Law, foreign entities can only rent land, build houses to sell or lease the houses. However, Prime Minister Nguyen Tan Dung has just instructed the Ministry of Construction to prepare the necessary documents on an experimental project, which would permit foreigners to buy houses and possess land in Vietnam, and to submit them to the National Assembly’s Standing Committee for opinions. If the project is approved, foreigners will be permitted to buy and possess a house in Vietnam for a maximum possession time of 70 years. More on buying houses and land in Hanoi.
Renovating in Hanoi property
Like elsewhere in the country, the option of renovation has not proved to be a particularly attractive option for developers thus far, with major players in the real estate market appearing disinclined to renovate run-down apartment blocks as a means of generating profit due to a variety of bureaucratic obstacles. However, the government is aiming to take on the bulk of these projects itself, and announced a nation-wide project which aimed to fix all run-down apartments by 2015. It demanded progress reports be submitted by the various provinces, outlining what was planned for the dilapidated buildings in their areas in order to comply with the 2015 deadline.
With foreigners currently not allowed to buy property, restoration projects are somewhat beyond their reach. However, with the planned relaxation of ownership laws due to come into force at the start of 2009, opportunities may open up. As with elsewhere, any venture of this type should begin with a structural survey report from an experienced property assessor/surveyor to ensure there are no hidden problems with the building. Two key issues with run down buildings in the city is that most apartments of this vintage, usually ranging from four- to five-stories high, do not include elevators or possess standardised fire protective systems.
Top tips for Hanoi property
Hanoi Property buyers guide
Guide to buying condos in Hanoi
Guide to buying houses and land in Hanoi
